Apple is not losting any dollar in sales. They expect to sell more phones as well more services! So, in fact reducing 50 dollars will result increasing the iPhone sales and also direct and indirect collecting more money!!

qiufuyao It all depends on the price elasticity of demand for the product. If the price elasticity if demand is inelastic (ie. a price increase will lead to a more than proportionate increase in sales and profits) than lowering the price might help them not help them make more money because consumers don’t respond much price changes. But if the price elasticity is very elastic, Apple couldn’t indeed make more money by reducing the price

I think your second reason...services revenue....is the valid one. I don’t think Apple still cares about competition price point pressures. Apple does care about market share and seeing that they can capture more people into their ecosystem...and selling them services.... is the actual strategy behind lowering the price as well as keeping a lower priced previous model in the lineup.

I’ve also got a feeling that Apple are don e with phones and are focusing their energy in new technology, their watch series. They did the same with iPods, soon they’ll be know as a luxury smart watch company.

Elasticity of demand, Apples demand is very inelastic, therefore dropping the price in theory would only mean that demand would exceed quantity by far too much. Meaning Apple would easily make the gain back they would have lost by decreasing the price, but I also do think they are pushing for services too, for example the base storage for an iPhone is still 64GB in 2019 that’s nothing for what people use phones for today; which would only lead people to buying more cloud storage (a service).

Hey Dave, that 1 dollar you mentioned is called marginal cost in economics. The thing is, the lower the price, more people are willing to buy, this, more units are sold. The aggregation of how much people would buy one unit of a product for each price point is called supply curve. So a direct call that apple lost 1bi because they lowered the price in 1 dollar is an error. In fact, stratechery did a very good explanation on apple becoming a service company and that does involve having more users, so lowering the price of the phones to keep a little margin is actually a good move in the overall. There are rumors on apple bundling several services for a fixed price with a phone included

How does your brain work. When something gets better but cheaper. It means there will be way more sales then last year’s iPhone XR. So basically those 1.3 billion dollars you were talking about aren’t necessarily left on the table. Because they will make that money back with the more sales of the iPhone 11. And they now have the arcade stuff, which will make them some good money too.

calling a 700 dollar price tag cheaper is the real comedy here and apple is making way more money than anyone with their expensive products.just because of the fact they reduced the price tag of an overpriced product doesn't mean it is cheaper or has value for money like other products in the market

No CEO actually thinks to themselves, "I'm ok with losing profit from this sector, since another part of the business is doing really well".CEO's don't arbitrarily compromise. Every part of the business needs to function as optimally as possible.Yes Tim Cook is ok with the price dropping to $699, but it's not because services have been doing well. It's because the net impact on shareholder profits is positive. That's the financial mindset of the executive.

Apple is finally feeling Market Pressure: I guess that's why their phone looks 2 years old, with that ugly notch and a stove shaped camera in the back. Dave, maybe you can make Apple see the pressure, they obviously don't. For $700 you get the latest One plus, with that superb display.